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Expat LifeMoney Know-How

The Best Credit & Debit Cards For Overseas Travel

The Best Credit & Debit Cards For Overseas Travel

The Best Credit & Debit Cards For Overseas Travel

With the world getting smaller every year, inter-country travel is no longer restricted to top-level business executives. A quick Google search for the (admittedly vague) term ‘how much do we travel’ yields hundreds of pages of results, a majority of them expounding upon the (low) costs of travelling to literally every place on the globe. A deep-dive analytic research project is hardly required to convince a person that all over the world people want to travel and they do. Better connectivity, falling airfares and rising incomes are just a few of the reasons why foreign travel is becoming so commonplace. Another important reason that international travel is becoming easier, more affordable and more convenient is the increasing prevalence and easy availability of international credit and debit cards.

What Are The Perks Of Using Credit Cards While Travelling?

Plastic, a common colloquial term for credit and debit cards offer a host of advantages to international travellers that cash often cannot.

For one, carrying a card is less likely to make you a thief-magnet and is therefore much safer than carrying wads of cash. A card can be more convenient, especially if it is a Visa or a Mastercard, two brands that are accepted at merchant establishments worldwide.

If you pay by card in the local currency, you can not only avoid the hassle of going to a foreign currency exchange centre to get your cash converted, you can usually get better exchange rates and also save on Dynamic Currency Conversion (DCC) fees that can rip a fair-sized hole in your wallet.

Learn More About DCC: Dynamic Currency Conversion Explained

Many cards offer attractive cash back schemes, loyalty points or airline miles that can be claimed for future purchases, helping you save even more money.

If you still prefer to use cash on your overseas jaunts, having a card can still be a good idea. Plastic can serve as your backup, a currency source you can tap into – either for direct purchases or for withdrawing cash at ATMs – when you run out of cash. You can even get a backup of a backup – a replacement card for little or no extra charge, depending upon the card type and provider!

Many travel credit cards provide complimentary travel insurance that can help you save money on insurance fees and at the same time protect you from a number of emergencies such as accidents and loss of passport.

Some travel credit card providers also offer 24X7 concierge services such as:

  • Emergency support: to find a clinic or English-speaking doctor for example
  • Restaurant or theatre reservations
  • Research on transportation schedules and routes
  • Making travel arrangements: rental car, guided sightseeing tour, hotel, etc.

If used properly and judiciously, credit and debit cards can provide convenience, safety as well as peace of mind while travelling.

And Now The Bad News…

The Best Credit & Debit Cards For Overseas Travel

Despite its convenience and ease of use, there are some costs associated with using plastic while travelling overseas. The most egregious (and bemusing, to a lot of people) of these costs is what is commonly known as a foreign transaction fee. This is not the same as a currency conversion fee.

  1. A foreign transaction fee refers to a charge levied on you every time you buy something outside the card-issuing country. The exact amount varies by card type and card provider but an average foreign transaction fee of approximately 3% of the transaction amount is fairly common. The problem with this fee is that even if you didn’t actually make a foreign purchase, it can still hit you if the transaction is processed outside your home country. Thus, even online transactions – a purchase made on an e-commerce site in your home country (such as PayPal or Amazon) from a merchant outside your country – with your card will also attract this fee. And for transactions made abroad, if you opt for Dynamic Currency Conversion aka DCC at a merchant establishment (this is when you agree to let the merchant convert the transaction cost into your home currency and you then pay in your home currency instead of the foreign currency), you again pay a percentage value of the transaction made abroad, which can be about 5% or even higher.
  2. In addition to foreign transaction fees, you can also end up paying a currency conversion fee, a charge that a merchant adds to your purchase for converting the transaction to your home currency. DCC plays a starring role in this, once again! Customers usually say Yes to DCC when asked by merchants (some unscrupulous merchants may not even ask!) mainly because they want to avoid the hassle of doing the Maths themselves: checking the exchange rate, comparing the transaction values in both currencies and figuring out which one is lower, i.e. cheaper for them. The problem with taking this shortcut is that you can end up paying another 3% of the transaction amount, over and above the foreign transaction fee.

In short:

A foreign transaction fee is a charge for simply using your card abroad.

A currency conversion fee is a charge for converting a foreign purchase into your local currency.

Because each fee charges for different things, you can end up paying both on a single transaction. Such charges can add up, and fast!

Is It All Bad News Though?

No, it’s not!

It is possible to avoid currency conversion fees by simply saying NO to DCC. Opting out of DCC – you have the legal right to do so – and paying in the local currency when travelling will help you avoid the shock of ‘unnecessary’ charges. If a merchant selects DCC without asking for your permission or in spite of your opting out of it, you can ask them to void the initial transaction and run it again in the local currency. And always ask to see the bill before the payment is finalised to make sure that everything on it is accurate including the billing currency and final amount.

It is also possible to avoid foreign transaction fees by getting a foreign transaction fee-free credit card. This can lead to huge savings on foreign spending. Although a 3% fee per purchase may not sound like a lot initially, it can really add up over time and therefore a fee-free card can be especially beneficial for travellers who make multiple purchases or who travel frequently.

In the next two sections, we cover some of the world’s best no foreign transaction fee credit and debit cards.

Top Credit Cards With No Foreign Transaction Fees

The Best Credit & Debit Cards For Overseas Travel

Customers in the USA seem to have the best and widest range of options when it comes to no-fee credit cards for international travel. However, a number of full-featured, transaction fee-free travel credit cards are available in other countries as well (with some notable exceptions, such as India and Singapore. In both countries, some low-fee cards are available, but no fee-free cards). Some of the best cards are given below.

Apart from the 0% foreign transaction fee, these cards also provide features such as:

  • Low or zero annual fees
  • Rewards programmes such as cash back, air miles or loyalty points
  • Extra perks such as free travel insurance or concierge services

Eligibility criteria for international credit cards usually differ from one card provider to another, but the most important – and common – criterion is the credit-worthiness of the applicant. The higher your credit score, the more likely you are to have a successful application. In addition, some criteria that card providers use to judge credit card applications include:

  • Citizenship or residential status
  • Annual income: the higher the better
  • Income source: stability matters
  • Permanent address

i. 28 Degrees Platinum Card

  • Card issuer: MasterCard
  • Country of availability: Australia
  • Foreign transaction fee: NIL
  • Annual fees: NIL
  • Currency conversion fees: NIL
  • Other fees:
    – 21.99% interest on purchases and cash advances
    – AUD 30 late fees
  • Features/benefits:
    – Free emergency card replacement worldwide
    – 24X7 concierge services worldwide
    – 55 interest-free days on purchases

ii. Bankwest Zero Platinum

  • Card issuer: MasterCard
  • Country of availability: Australia
  • Foreign transaction fee: NIL
  • Annual fees: NIL
  • Currency conversion fees: NIL
  • Other fees:
    – 21.99% interest on purchases and cash advances
    – AUD 10 dishonour fee
  • Features/benefits:
    – Overseas travel insurance
    – AUD 6000 minimum credit limit
    – 55 interest-free days on purchases

iii. Rogers Platinum MasterCard

  • Card issuer: MasterCard
  • Country of availability: Canada
  • Foreign transaction fee: NIL
  • Annual fees: NIL
  • Currency conversion fees: NIL
  • Other fees:
    – 19.99% interest on purchases
    – 21.5% interest on cash advances
  • Cashback/bonus:
    – CAD 25 cash back on  first purchase
    – 3% unlimited cash back rewards on all eligible purchases in a foreign currency
  • Other features/benefits:
    – Additional cards provided free

iv. Halifax Clarity

  • Card issuer: MasterCard
  • Country of availability: UK
  • Foreign transaction fee: NIL
  • Annual fees: NIL
  • Currency conversion fees: NIL
  • Other fees:
    – 18.95% or 25.95% annual variable interest on purchases, cash transactions and money transfers
    – £12 late fees
  • Features/benefits:
    – 56 interest-free days on purchases

v. Aqua Reward Card

  • Card issuer: MasterCard
  • Country of availability: UK
  • Foreign transaction fee: NIL
  • Annual fees: NIL
  • Currency conversion fees: NIL
  • Other fees:
    – Annual interest on purchases, cash transactions and money transfers varies between 34.95% & 59.95%
  • Cashback/bonus:
    – 0.5% Cashback (up to £100 per annum) on every purchase
  • Other features/benefits:
    – Initial credit limit: £250 – £1,200
    – 48 interest-free days on purchases

vi. Capital One QuickSilver

  • Card issuer: VISA
  • Country of availability: USA
  • Foreign transaction fee: NIL
  • Annual fees: NIL
  • Currency conversion fees: NIL
  • Other fees:
    – 14.74% – 24.74% APR on purchases and money transfers
    – Cash advance fees: Greater of USD 10 or 3%
    – USD 12 late payment fees
  • Cashback/bonus:
    – Unlimited 1.5% cash back on every purchase, every day
    – One-time USD 150 cash bonus on spending USD 500 on purchases within 3 months from account opening
  • Other features/benefits:
    – 0% intro APR for 15 months

vii. Capital One Venture

  • Card issuer: VISA
  • Country of availability: USA
  • Foreign transaction fee: NIL
  • Annual fees: NIL for 1st year, USD 95 from 2nd year onwards
  • Currency conversion fees: NIL
  • Other fees:
    – 14.74% – 24.74% APR on purchases and money transfers
    – Cash advance fees: Greater of USD 10 or 3%
    – USD 38 late payment fees
  • Cashback/bonus:
    – Unlimited 2X miles on/dollar per purchase, every day
    – 50,000 bonus miles on spending USD 3,000 on purchases within the first 3 months from account opening

viii. Chase Sapphire Preferred Card

  • Card issuer: VISA
  • Country of availability: USA
  • Foreign transaction fee: NIL
  • Annual fees: NIL for 1st year, USD 95 from 2nd year onwards
  • Currency conversion fees: NIL
  • Other fees:
    – 17.99% – 24.99% APR on purchases
    – 26.99% APR on money transfers
    – USD 38 late payment fees
  • Cashback/bonus:
    – 50,000 bonus points for spending USD 4,000 on purchases in the first 3 months from account opening (equivalent to USD 625 airfare)
    – 1X point on all other purchases
  • Other features/benefits:
    – Trip cancellation and baggage delay insurance
    – 24X7 customer support

ix. American Express Gold Card

  • Card issuer: American Express
  • Country of availability: USA
  • Foreign transaction fee: NIL
  • Annual fees: USD 250
  • Currency conversion fees: NIL
  • Other fees:
    – 20.24% APR for ‘pay overtime’ feature
    – USD 38 late payment fees
  • Cashback/bonus:
    – 25,000 bonus points for spending USD 2,000 on purchases in the first 3 months from account opening
    – 4X reward points at US restaurants and supermarkets
    – 3X reward points on air tickets
    – USD 100 airline fee credit/year
  • Other features/benefits:
    – Payment flexibility

x. Barclaycard Arrival Plus World Elite MasterCard

  • Card issuer: MasterCard
  • Country of availability: USA
  • Foreign transaction fee: NIL
  • Annual fees: NIL for 1st year, USD 89 from 2nd year onwards
  • Currency conversion fees: NIL
  • Other fees:
    – 17.99% – 24.99% APR on purchases
    – 27.24% variable APR on cash advance
  • Cashback/bonus:
    – 60,000 bonus miles for spending USD 5,000 on purchases in the first 90 days from account opening
    – 2X miles on every purchase
    – 5% miles back on every redemption
  • Other features/benefits:
    – Fraud Liability protection
    – 24X7 concierge service

xi. Barclaycard Ring MasterCard

  • Card issuer: MasterCard
  • Country of availability: USA
  • Foreign transaction fee: NIL
  • Annual fees: NIL
  • Currency conversion fees: NIL
  • Other fees:
    – 0% intro APR for 15 months on balance transfers made within 45 days of account opening
    – 13.99% APR after 45 days
  • Features/benefits:
    – Fraud Liability protection
    – International chip and pin card

xii. Bank of America Travel Rewards Credit Card

  • Card issuer: VISA
  • Country of availability: USA
  • Foreign transaction fee: NIL
  • Annual fees: NIL
  • Currency conversion fees: NIL
  • Other fees:
    – 0% intro APR for the first 12 billing cycles
    – Then 16.99% to 24.99% variable APR will apply
  • Cashback/bonus:
    – 1.5X points for every USD1 spent on all purchases everywhere, every time
    – 25,000 bonus points for spending USD 1,000 on purchases in the first 90 days from account opening, redeemable for USD 250 statement credit for travel purchases
  • Other features/benefits:
    – Fraud Liability protection
    – International chip and pin card

Top Debit Cards With No Foreign Transaction Fees

The Best Credit & Debit Cards For Overseas Travel

The main feature that differentiates credit and debit cards is where the money is drawn from when a purchase (either local or foreign) is made. While both credit and debit cards are useful for travellers in that they are both convenient and eliminate the need for holding cash; whether you prefer one or the other depends on how and when you’d like to pay. When a consumer uses a debit card, the money is directly debited from his withdrawal account (also known as checking account). But when he uses a credit card, the purchase is charged to a line of credit for which he is billed later. He has to pay the bill plus interest if he pays after the card’s interest-free period has expired. The interest rate and interest-free period are set by the credit card provider.

A debit card is also known as an ATM (cash withdrawal) card but can also be used for purchases at merchant establishments.

Some of the world’s best checking accounts and debit cards for international travel are given below. Apart from the 0% foreign transaction fee, these cards also provide features such as:

  • Low or zero monthly fees
  • Low or zero international ATM withdrawal fees
  • Low or zero international currency conversion fees
  • Zero third-party ATM withdrawal fees OR refund

i. Tangerine Thrive Chequing Account

  • Card issuer: MasterCard
  • Country of availability: Canada
  • Foreign transaction fee: NIL
  • Monthly fees: NIL
  • Currency conversion fees: NIL
  • International ATM withdrawal fees:
    – NIL for ATMs in the Global ATM Alliance
    – Surcharges and/or convenience fees applied on ATM withdrawals at non-participating financial institutions 

ii. Schwab Bank High Yield Investor Checking Account

  • Card issuer: VISA
  • Country of availability: USA
  • Foreign transaction fee: NIL
  • Monthly fees: NIL
  • Currency conversion fees: NIL
  • International ATM withdrawal fees:
    – NIL for ATMs in the network
    – All 3rd-party ATM fees refunded
  • Other features:
    – No minimum opening deposit

iii. Capital One 360 Checking Account

  • Card issuer: MasterCard
  • Country of availability: USA
  • Foreign transaction fee: NIL
  • Monthly fees: NIL
  • Currency conversion fees: NIL
  • International ATM withdrawal fees:
    – NIL
    – But no refunds on fees charged by ATM operators (not a bank charge)
  • Other features:
    – No minimum balance required

iv. Citibank Plus Everyday Account

  • Card issuer: MasterCard
  • Country of availability: Australia
  • Foreign transaction fee: NIL
  • Monthly fees: NIL
  • Currency conversion fees: NIL
  • International ATM withdrawal fees:
    – NIL
    – No third-party fees on Citibank ATMs worldwide
  • Other features:
    – No transfer fees to send or receive money, anywhere in the world

v. Virgin Money Essential Current Account

  • Card issuer: VISA
  • Country of availability: UK
  • Foreign transaction fee: NIL
  • Monthly fees: NIL
  • Currency conversion fees: NIL
  • International ATM withdrawal fees:
    – £1.50 per transaction
    – No currency commission charge but ATM operator charges may be added

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